Alfa bank makes push on mortgages for expats

Alfa bank has announced new mortgage options for non-residents working in Russia under special conditions applicable for all secondary market residential real estate approved by the bank.

ґThe maximum mortgage amount has been lifted to 45 million roubles or its dollar equivalent with an initial payment not less than 20% of the total mortgage amount.

The conditions for non-residents of Russia are essentially the same as those for Russian citizens with only difference being verification of working status in Russia for three years.

Ilya Zibarev, Deputy Head of the Retail Division in Alfa-bank, says non-residents should have equal opportunities on the mortgage market.

"Alfa-Bank always strives to help clients to accomplish and fulfill their plans and desires. We believe that factors such as non-Russian citizenship or need of a large amount of funds should not limit our customers` needs. For this reason, Alfa-Bank is happy to introduce mortgage programs for non-Russian residents providing equal conditions for all our clients no matter what nationality they hold. We have improved our programs and significantly increase the credit limit."

Alfa-bank offers mortgages over 5 to 25 years on the secondary residential real estate and cottage housing, as well as refinancing of existing mortgages. Apart from documents proving three years working in Russia, expats are required to supply the traditional legal salary reference 2NDFL form or a bank form. They will not require provision of any registration documents. If the customer is already an existing Alfa-Bank payroll client there are for additional incentives.

Korolyuk Mikhail, Head of Investment Management at IFC Solid, says mortgage can be attractive to non-citizens who wish to remain in Russia or become a Russian citizen. He says the move to provide mortgages for expats could help boost commitment to Russia amongst employees and business people already in Russia, but adds that it is likely to have only a minor effect.

"The Russian state government is promoting Russia abroad as the attractive country for business with growing markets and emerging economy to that extent Russia`s popularity has grown among foreign companies who have recently opened their rep offices and branches around Russia. That move have seen many expatriates looking forward to stay and establish families in Russia, buy houses and invest in the country. Alfa bank mortgage program for non-residents, to my view, is an attractive option and a service that aligns with country`s strategy to becom a more prominent international financial center, making Russia comfortable for citizens and non-residents as well. However, it is a risky project which is affordable and feasible only to top Russian banks such as Alfa bank. On the other hand this option will be attractive and in demand only if the mortgage rates and conditions will suit expatriates. Today real estate has a moderate low rate of growth in value. For instance, rental payments which are around 7% can not cover mortgage rates thus non-residents who don`t plan to stay over 5 years in Russia will still be renting apartments assuming that most companies cover accommodation expenses for expatriate employees."

sections: Economics